Timber Cabins produces cabins for outdoor adventurers. It makes two different types of cabins: Rustic and Luxury. Fixed overhead costs are $1,800,000. Other sales and variable cost data are as follows: Rustic Sales price $ 24,000 Variable manufacturing cost $ 7,500 Variable selling cost $ 1,200 Machine hours required 100 Luxury Sales price $ 38,000 Variable manufacturing cost $ 11,600 Variable selling cost $ 3,000 Machine hours required 160. The production machinery can only efficiently be operated for 11,000 machine hours each year. If this is the case and all cabins that are produced can be sold and at any sales ratio, which cabin should be produced? How much more profit is earned from producing one cabin over the other?

Answer rating: 100% (QA)

i If this is the case and all cabins that are produced can be sold at any sales ratio which cabin should be produced The contribution margin per unit ... View the full answer